(Kitco News) – Speculators snapped up significant bullish U.S. gold futures and options, according to U.S. government data released late Friday.
In both the disaggregated and legacy weekly commitment of traders reports issued by the Commodity Futures Trading Commission, the managed-money and larger trader speculative non-commercial accounts greatly increased their net-long positions in the yellow metal. The data is for the trade date ended July 12 and encompasses both the futures and options activity combined at the Comex division of the New York Mercantile Exchange.
A rise in prices for gold likely encouraged funds to add to net-long contracts. During the timeframe measured, July 6 to 12, most-active August gold futures contract on Comex rose $33.10 an ounce and settled at $1,562.30 on July 12. Comex September silver lost 28.2 cents an ounce to $35.634. October Nymex platinum gained $2.90 an ounce to $1,736.30 and September Nymex palladium fell $5.75 an ounce to $767.45. Comex September copper rose 56.5 cents a pound to $4.3915.
Morgan Stanley noted the “mounting worries over the U.S.’s credit rating providing the stimulus this week, although speculation over QE 3 also kept gold’s price hot. With real interest rates remaining low and the consensus outlook for the U.S. currency looking bleak in the coming quarters, we believe there is little to prevent gold prices from touching fresh record highs in the coming weeks.”
Managed-money accounts returned to adding to their net-long gold positions in a significant way, which now stand at 222,184. They added 45,576 gross longs and added 1,184 gross shorts. CFTC data show these speculative accounts are nearly completely long, as the total gross short position is 6,446 contracts.
The producer category added to positions in gold on both sides, adding a significant number of gross shorts, lifting its net-short position. Swap dealers cut longs and added to shorts, increasing their net-short position.
In the legacy report, speculators, known as non-commercials, increased gross longs by 55,159 contracts and raised gross shorts by 6,090 contracts, pushing up their net-long position to 236,193 contracts. Commercial traders cut gross longs and increased gross shorts, leaving them with a bigger net-short position.
“Net longs as a percentage of open interest has risen to 38% from hovering around the low 30s with net fund length at a three-week high,” said Barclays Capital.
Ken Morrison, editor and founder of online newsletter Morrison on the Markets, said that across commodities, the increase in speculative bullish positions in gold was the most aggressive. “Notably, gold miners were willing sellers hedging risk and future production,” Morrison added.
Managed-money accounts added to longs and cut shorts in silver, increasing their net-long for silver to 20,703. They raised gross longs by 1,214 contracts and cut gross shorts by 661 contracts.
In silver, producers and swap dealers both cut longs and added shorts, raising their respective net-short positions.
The speculator category in the legacy report showed an increase in gross longs and a cut in gross shorts, meaning the net-long for silver rose to 26,819 contracts. This category shows that the non-commercial trader is nearly completely long in the white metal, with total gross shorts at 3,808 contracts.
In the legacy report, commercials added to net-short positions in silver, having cut gross longs and increased gross shorts.
Funds cut bullish exposure to platinum, but added to palladium longs. In the disaggregated report, managed-money accounts are now net-long 15,219 contracts in platinum, as they cut slightly more gross longs than shorts. In palladium, managed-money accounts added gross longs and cut gross shorts, lifting the net-long to 11,970 contracts.
There was little change in the legacy report for platinum, but as non-commercials cut more short contracts than long contracts, the net-long for funds rose slightly, to 17,834. Commercials remain net-short. Palladium speculators in the legacy report hiked gross longs and cut gross shorts and are now net-long 13,586 contracts. Commercials are still net-short, but cut positions on both sides.
Managed-money accounts returned as big net-buyers in copper for the second week in a row, having increased their net-longs to 27,030 contracts. Speculators in the legacy report also were net-buyers of the red metal, as their net-long increased to 23,786 contracts.For further information, see the CFTC website at: